Credit Card Companies Implement Changes

Government mandated credit card lending changes are beginning to take effect. Officials are hoping the changes will help consumers get out of debt faster and put an end to predatory lending. Kelli Grant, Sr. Consumer Reporter for SmartMoney.com, explains.

Among the new credit card lending rules, companies now have to give you at least 45 days notice of any changes to your account. These changes include interest rate raises and changes to the fees associated with your card. "Before, they only had to give you 15 days notice," says Grant. "Ideally, that advanced notice is going to help you reassess whether the card is the right one for you." This rule gives you more time to consider switching cards and better weigh your options.

Lenders are also required to implement longer grace periods. "Card issuers now have to mail out your billing statement at least 21 days before your due date," says Grant. This gives consumers more time to pay their bill and lessens the chance that you'll be late with a payment. "You don't have to run out the post office as soon as you get your bill to make sure that you're not paying late," says Grant.

Bigger changes will take place on February 22, 2010. "Payments have to go to the highest rate portion of your balance first, that issuers have to give you a reasonable due date of 5:00pm... and they have to put an end to bad practices like universal default and double cycle billing," says Grant.

Overall, Grant says these changes will benefit consumers. However, she adds that creditors will be scrambling to hike interest rates and fees before the major changes take place in February. Some are even slashing unused credit lines. "You can almost expect that you're going to get a letter from your issuer soon telling you in 45 days, your rate is going up," says Grant. Check your mail carefully; most communication from credit card lenders will be mailed to you directly.

If you're thinking of switching cards, Grant suggests visiting www.BillShrink.com to find a consumer-friendly card that's right for you. "They've been tracking as issuers comply with some of these new reforms, and some of these issuers are putting them into place a little bit earlier," says Grant.

For more information on the new credit card changes, visit www.SmartMoney.com.

By Erin Petrun